the letter "o" and the number 16 trillion. >> win or lose, this is my last political campaign so i'm trying to drink it all in. unfortunately, mayor bloomberg will only let me have 16 ounces. >> that's the president and mitt romney in new york at a charity dinner last night. we'll have more on their comic relief on this rather tough day for the bulls. but down to tyler in the heat of the action. >> some pretty good zingers there last night. not much to laugh about today down here on the floor of the new york stock exchange or up town at nasdaq. rainy outside. soggy inside. the markets opening lower and they have been slowly legging down like stair steps ever since. down 80, down 100, down 130, and now down 172 1/2 points trading at 1,376.

the nasdaq down even more in percentage terms by 2%. what are we seeing here? >> tough patch for earnings. banks were pretty good last week. numbers were beating it. now we're getting industrials, tech stocks and it is a little dicier an revenue growth isn't there. hitting the lows on the dow. story is simple -- weakness going right into the european close, euro to the downside, dollar to the up side. that usually hurts our market. indeed it did. look at industrials and materials. ge, in line but revenues were light. inni ingersoll-rand. advanced micro's laying off 15% of its workforce because of the weak pc outlook and vidnvidia i

one of their competitors. >> weakness in tech land. as you point out, it is the of revenues that aren't really delivering. >> 1.3% for the quarter, year over year. that's down from about 5%. that's that weak global economy. >> bob pisani, thanks very much. google and apple among big cap techs getting really whacked today. bertha coombs is at the nasdaq. >> google started with a bit of a bounce but now it is trading below the low it hit yesterday, 24 hours after that accidental release of its earnings. it's off 3%. that's certainly a big drag. microsoft not helping, though microsoft disappointing as well. weak pcs is what they say is the problem. also weakness in europe. what's interesting, look at riverbed, up 12.5%. much smaller company but they saw spreads across the board. sandisk, a bright spot in the chip space. up on its news but marvell is the other side of that, they

cut, their cfo is resigning. the chip space in particular because of the weakness in pcs having a lot of difficulty. zplin deed, bertha, thank you. the dow is now down 175 points on the trading session. earnings pushing the markets lower today. mcdonald's missing on the bottom line. that just makes it on the top line as well. general electric out with its results. it met profit estimates but its revenues fell short. and rival honeywell beats eps estimates but its sales fell short for that company. we have the first full week of earnings season under our belt. how are we shaping up? it is a rough ride today, mary thompson. >> it's been a rough ride so far, sue. as expected, profits are down from last year's third quarter an revenue growth, there isn't much. on a blended basis which combines forecasts for the companies that haven't reported and the results from those that have, profits down 1.8% last quarter. the actual results from the 116 s&p members reporting so far throw a 3.7% decline in

earnings. that's a bit worse than forecast. ahead of the earnings season, analyst estimates called for profits to fall 3% from last year as companies struggled with its weak global economy. this scene impacting materials an energy earnings the most in the third quarter with telecom profits falling back as well down about 14.9%. the biggest positive surprise so far this earnings season, a whopping 72% of financials have posted better than expected results with 37% of the financial sector having released their numbers. the beats by banks and other financials well above the average number for the s&p 500 members that have reported though, just over 60% beating forecasts, slightly less than the quarterly average in 1994. a larger than expected percentage missing at almost 26%. as far as the top line goes, revenue on a blended basis down .2%. actual revenue growth for those reporting so far, up a sca scant .8%. of course, next week being the

busiest one for earnings, we're going to have a clear he picture on just how good or how bad the results are. >> mary, thank you very much. jim yourio has been with us all week. it's been a terrific week to have you with all the cross currents that we see. as you look at the marketplace right now, what are you watching? what do you see? >> it's clearly the earnings. this morning i was thinking there's some bad news out of china, that's going to weigh on things but it seems at the end of the day earnings have taken the center stage and they're not giving it up. mary said about the banks, man, i want bank earnings back again. that's way more fun than what's going on now. >> that's an understatement. >> i wouldn't say this is fairly orderly. we're still in the range that started in the bernanke qe infyty. right now i think we're okay still. >> i want to take you back to 1987. you were work rg in the business, i was a 29-year-old reporter covering it for then financial news network. you reminisce of that day.

for me, it was -- there was terror. >> no doubt. i had been in the business three or four months and my chief responsibilities up to that point was getting my boss's dry cleaning but that day i was taken from the currency pits -- i worked for goldman at the time -- and thrown in the s&p 500 pit. emotion and terror was so palpable. for me i didn't have anything to risk and you could still feel it. that's been a really big lesson for me. flashforward to yesterday like google, what something like that happens, you remember what emotion can do and how panic begets panic. that's an important lesson for me. i remember to this day. >> it colors the way you look at the market from then on. >> we'll talk more about that in the next half-hour with a couple of other people who were working floort during the 1987 crash. ty, down to you. to housing. today's existing home sales number could point to higher home prices down the road. diana olick joins us from washington, d.c. it sounds like it's all about the law of markets, supply and demand here. >> it absolutely is, tyler.

existing home sales fell slightly along with expectations. but the big headline here is a lack of supply. that's just not enough homes for sale right now. inventories fell 3% month to month but they're down 20% from a year ago. out west where much of the distress in the market has been, inventories are down a striking 30%. the problem is more clear when you look at sales figures by price range. sales of homes under 100k were down across the nation but down 47% out west your over year where investors have really cleaned out the market. sales of homes over $1 million are up 13% but that's barely 2% of the u.s. housing market. the good news is that lack of supply pushes home prices higher. the realtors even said today also that builders need to ramp up production. really what we need is regular sellers to put their homes on the market. the trouble is there are 15 million, or one-third of all homes with a mortgage, according to zillow, under water at the end of q2. that doesn't even count those that are in a near negative

equity position. so until home prices get higher, those folks are not going to be able to sell. we've got more numbers on this on the blog, realtycheck.cnbc.com. >> diana, thank you. to jackie with a "market flash." >> want to bring your attention to lululemon falling after credit suisse said in a note that the company is offering slightly more discounts and also producing more casual apparel. credit suisse is somewhat concerned that those new products are eliciting a weak response. we're seeing the stock fall nearly 7% today. but cs still maintaining an $84 price target b target and outperformrating on the stock. >> new fears about tech sparking a sell-off in the sector today. and google still struggling with how to make money on mobile. will anyone really figure that one out? we'll tell you who's doing well in that space. also, while many americans tighten up their belts, the 1% are getting ready to spend more this holiday shopping season. how much do they plan to splurge

and what will they buy? first, more from the al smith dinner last night. >> people seem to be very curious as to how we prepare for the debates. let motel you what i do. first refrain from alcohol for 65 years before the debate. second, find the biggest available straw man and then just mersly attack him. big bird didn't even see it coming. helium delivery. put it on my spark card! [ pop! ] [ garth ] why settle for less? great businesses deserve the most rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet?

welcome back to "power lunch." prudential has been advanced to the final stage of federal review to determine if it's systemically important. stern aging calling the revelation shocking news and saying sarcasm is intending. take a look at the stock, down nearly 3% at 58.10 today. the street keeping a predictably close eye on google and microsoft today after a tough earnings day for that twosome yesterday. before we get to jon fortt to sort it out for us and the downfall of the spiraling, julia boorstin is looking at the achilles heel laid bare in google's earnings report. has anybody figured out mobile? >> it's worth pointing out that despite the fact that the shift in mobile is hurting google's revenue, when it comes to mobile ads, google is making much more

money than anyone else. e marketer estimates google will generate $1.4 billion in net mobile ad revenue. that's much more than any of the other rivals. look at that full screen there. google is projected to grow that mobile ad revenue by another $1 billion next year. google is well positioned when it comes to mobile ads because it does 95% of all mobile search. that's a big opportunity. the issue is pricing, because mobile search ads are less valuable. people are less likely to make big purchases, whether it is for an airplane flight or a hotel room, when they're on their smartphones. another good player here in the mobile ad space is pandora. that's the internet radio player, largely because people just listen to a lot of internet radio on their smartphones. now facebook, of course, also has this mobile challenge. they're just starting to make money on mobile but e marketer projects that facebook's mobile ad revenue will grow by more than five times by 2013. facebook's mobile ads are very

valuable because it has fewer. facebook's challenge is increasing the volume of those ads. to jon fortt, first intel this week, now microsoft, blame being the fall of the pc for some of the earnings woes that company's going through. is the home computer business basically dead as we know it? >> the key words there are "as we know it." and yes. the pc is not dead but the pc business as we knew it is. let's recap microsoft and intel earnings. moishg soft had a particular weakness in the windows division down 33% ahead of windows 8 launch. that mirrors what ibc's numbers showed last week. intel's numbers also weak pc sales. internet buyers couldn't keep making up for consumer softness. gone are the days of the happy winit will e lchl wintel empire.

hp and dell are going out of their ways to down play their ties to the pc business. what happens next? two scenarios. one in the next month we're going to get most likely an ipad mini and a 9-inch kindle fire hd. both around that $300 price point. if people buy those instead of new windows 8 pcs, you're going to see real questions in late january earnings season about whether the pc business really is in a tailspin. scenario two, if microsoft's surface does decent sales and windows rt gets a foothold in the tablet market, microsoft could start to shape a new story line. if it can remake the pc business into a hybrid pc/tap blet business, it might be able to stop the bleeding. now to a headline that caught our eye this morning. toyota prius, the popular hybrid car, is now the best selling car in california. phil lebeau covers the auto industry as you know. >> not surprising given the success toyota has had in california. take a look at the year to date sales numbers.

these come from the california new car dealers and experian as they crunch numbers. prius, top selling, followed by the civic and accord. what's happening here? three things. first when you look at the prius sales up 19% year to date, they have more models for sale. it used to be one prius. now there are four versions of it. year to date in california sales up 41.8%. in part because toyota has been much more aggressive when it comes to lease deals that they're offering particularly in california. i talked to one dealer who said, you can get this for $199 a month. and also when you look at toyota overall and the dealerships in california, it is the top selling brand in california. 1 in 5 vehicles there are roughly speaking 1 in 5 vehicles toyota brand. sue, have you a full compliment of toyota vehicles in the showroom. if you look at shares of toyota, keep in mind, california is where the bread and butter happens for this company and the prius right now is leading the way. >> it makes some sense given the fact that everybody drives -- some people drive very long

distances in california. their gas prices have been extremely high. >> they tend to be higher than the rest of the country. >> they always have been. but does it not also point out the fact that if you come up with the right green technology, that the consumer will adapt to it and embrace it in fact? >> eventually. but it takes a matter of getting comfortable with that technology. remember, the prius, very first one came out back in what? 2001? 2002? it's taken some time for people to get used to it. now people look at a prius, they don't look at it as a hybrid car. they simply lock at it as a car. will that eventually happen with electric vehicles? it is too early to say. that's the hope for people like general motors where they make the volt or for nissan. but that's very early in the acceptance stage. we've already seen that bridge passed with the prius in terms of hybrids being viewed as a regular car. >> phil, thanks a million. speaking of the consumer around what they are buying, no pressure here but there's only 66 days until christmas.

i'm feeling a lot of pressure. it is shaping up to be a tale of two christmases this year. while many americans are still struggling in this economy, the ones who aren't are apparently gearing up to splurge and spend more money this holiday season. so what are they going to spend that money on? cnbc's wealth editor robert frank is here with more. they are going to spend. >> americans as a whole are expected to spend about 3% less this christmas but the 1%ers, they're going to be burying the tree this year with gifts. a survey from american express publishing shows 1% plans to spend 33% more this holiday season on gifts. their total spending will rise by $600 million. that's more than $3,500 per household and more than seven times what the rest of the americans will spend, on average. now the tale of two christmases is really being driven by economics. the wealthy have recovered almost all their wealth since the crisis. that's because of these booming stock markets. the rest of america is still dealing with high unemployment

and the weak housing market. so gifts are the rich buying, to your question? well, 39% of the percenters plan splurge for their spouses. that's spend more than $5,000 for a single gift. women will get clothing, jewelry, spa treatments. they're extremely likely to buy gifts for themselves. they're also buying a lot of their gifts this year online for convenience. time of course is the one gift that even the rich cannot buy for christmas. >> that is very true. i don't know whether i'd buy something that's thousands of dollars online, and i'll probably never know. robert, thank you. >> you never know. ty, down to you. >> i've already got your gift for christmas, sue. already done all my shopping -- >> you are such a good guy! that's why i love ya. let's all focus back 25 years ago, shall we? crash of '87. i remember it. you probably remember it. 25 years ago today the dow went into a free fall dropping 22%.

will we ever see a crash like that again? and as we head out, it is a big down day here but there are winners, if you know where to look. how about capital one? en honeywell and scripps networks. all bucking the trend. new highs today. >> of course, new yorkers also have a big choice to make. you have to decide which one of us you want holding up traffic for the next four years.

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very tough day on wall street today on this friday, october 19th. it may carry over into monday from what we're hearing from some of our sources. the dow is off better than 1%. the nasdaq's off almost 2% on the trading session. and west texas intermediate is also off just under 2% on the trading day. we have broad based selling, including the gold market. they seem to be taking risk off the table in almost every market you see. the 10-year note, the yield is now at 1.77% on a one-week basis, we've seen a 7.25% move in the 10-year note. we decided to not do analyze this but analyze the markets for us at this point. it is interesting that we are seeing such broad based selling in all risk categories. >> but not in banks. if you look at bank of america, which is something that we talked about earlier in the

week, it's holding in like a champ. i was thinking if it traded above like 9.62ish, i was probably going to add. that's encouraging. plus some of the economic data over the last couple weeks is encouraging, too. i don't think all is lost yet. >> why is the selling so broad based in your opinion on this friday though? granted, we are going into the weekend, earnings have not been great. but we knew that earnings were not going to be great. i remember talking to you about that several weeks ago. >> of course. but the leaders are really big companies -- google, microsoft. i know we think of them as just in the tech sector but they have ramifications throughout the entire market. if you think that you miss google, move over to microsoft. >> i think the one i paid most attention to was mcdonald because they called the global environment challenging. that seems to be the buzzword today. >> that's so interesting, too. mcdonald's is a confusing company. sometimes a challenging global economic environment for them as people dial down and go to mcdonald. that's very interesting.

stocks are selling off. no love for the safety of gold either. metals prices getting ready to close. we'll head down to the nymex for the final trades there. plus, 25 years ago today the u.s. stock market was crashing before our very eyes, spinning into free fall. the dow plummeting more than 20%. more than $500 billion in market cap lost. could we see an event like this again? we'll talk about that. as we head out, a look at how some of america's most widely held stocks are faring today. >> as president obama surveys the waldorf banquet room with everyone in white tie and finery, you have to wonder what he's thinking. so little time, so much to redistribute. americans are always ready to work hard for a better future.

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let's go up town quickly to bertha coombs. >> tech is really where the downdraft is coming from today and the big whole of it is the with wintel alliance. microsoft among the big drags today, down 2.5%. intel started things off in

terms of the down beat note in tech earnings this week. we're seeing it in the chip space today. semi-conductors in particular, marvell which deals with customers like research in motion. when you don't have customers that are doing very well, you are not going to do as well. marvell warning, fbr cuts it. dragging down chips today. we're seeing a broad sell-off. this is an indication of how strongs things have been recently that this is such a big deal. dow industrials we moved a little bit weaker early on. part of it was a little bit of weakness in the euro, strength in the dollar. but largely this is disappointment on earnings. now that we've moved away from banks and into techs and

industrials and materials, a lot of bears complain. we only see heavy volume on down days. that's true. volume is heavier today than it normally is. here's some of the etfs that are getting heavy today. spdr, the triple q and tech stocks. china and germany having strength in term of those country's etfs. sharon epperson is track being the action up at nymex. >> gold prices are finishing down more than $20 right now, around $1,724. the good news though is that gold is closing here above the 50-day moving average, the $1,720 level was a key level of support. we did see gold break below several key levels throughout morning and really it is a lot of disappointment over what has happened in the eurozone, the eu summit really no real conclusion there. that's certainly weighing on gold. not only gold, metals across the

board lower on this friday. back to you. let's go out to the bond pits now. rick santelli tracking the action at the cme. >> today the market makes some sense. of course when we see the downdrafts in equities, many times your company buys some buying in treasuries, whether it is money moving in and out or a speculative knee-jerk reaction, either way, it is down a half-a-dozen basis points. you can see the pattern very similar to a 10-year in europe, just a different level. they're hovering right around 1.60. if you look at a dollar-yen chart, can you see the dollar has opened up. august is the last time we were at these dollar levels. we'll continue to monitor this. the bank of japan and ministry of japan seems to be on the course for weaker rates which

would make their currency even cheaper. the market is down today but this is not like it was 25 years ago. all day on cnbc we've been remembering the crash in 1987. on today's date the dow dropped 22.6%, 508 points. largest one-day decline at that time in points. stilt largest in percentage term. a record 604 million shares changing hands at the nyse. that sounds like a quaint number these days, doesn't it, art cashin. bob pisani is with us, art cashin is here. art, it does seem quaint, 600 million in shares. but it wasn't quaint that day when we were all here watching the market melt. >> no. it was overwhelming. it was relentless selling and every time they tried to kind of slow things down a little bit, it didn't work. you had futures trading in

chicago had grown in the previous couple of years and they introduced something called portfolio insurance which told people don't worry, can you can protect yourself by selling those futures and they didn't need an uptick to sell shorts. it was like having parallel roads, one where you could go 100 miles an hour and one where you could only go 55. >> it wasn't just a one-day sell-off. it had begun the week before, as we all remember. sitting here today looking at a sell-off but that's certainly a much more modest one in those terms. are we better off today? are we safer than we were then from that kind of decline? >> you can look at it two different ways. i suppose on a certain level, after that event, right, the industry instituted circuit breakers. so in the event that the market really starts to spin out of control, there are certain levels where it will be an automatic shutdown and it is something that everybody knows but wouldn't create panic in the sense why are they shutting it down. the circuit breakers would jump in there and shut it down. the only difference is and arthur makes the point, in 1987

there were 5,500 people actually doing it by hand and able to control. today with the technology once again you run into that sense of, computers gone wild. >> machines can rule the world. >> i don't think people realize, they were actually doing the books by hand still. they were still going over to a display panel technology at the time. you can imagine what that did to the slowness -- how that slowed the market down and made it a big issue. >> look at the picture of the floor of the exchange there. >> those are the first display terminals up there. >> sue herera and i of course are much too young to remember that day. >> i was 29. it was an amazing day certainly, but one of the things i think that has improved, keep in mind, in 1987, you didn't know for a couple of days w pos you were in because settlements took a couple of days. that's changed now. i know when the night trading debacle happened, a lot of people were complaining that they didn't know what their

position was. but keep in mind back in 1987 -- art, maybe you can speak to this -- settlement took a long time and you went into the weekend not exactly knowing where you stood in terms of a position. >> it was even a little bit worse than that. settlement was five days. but remember, it was a completely verbal market. >> exactly. >> i would look in tyler's eyes and say i sold you $50 million worth of equities. we'd walk away without exchanging a contract or anything else. so i had had to worry first that both tyler and i had gotten the data correctly, and number two, with all due respect to tyler, or whoever else, i had to worry would he still be able to pay for that stock in five days. >> the potential errors in that when there were so many trades coming through was part of a concern about that settlement process, that c plus 5 settlement process. nobody was sure how many errors there were and what their position was. >> i think that's an improvement

over today. but do you think, gentlemen, with the flash crash that we've had, with some of the computer glitches that we've had, do you think that there's more room now for a return to some type of human element than there was, say a year or two ago? >> listen, from your lips to god's ears, there should be more human elements involved in this. right? but i think what happens is -- and i think we're moving that way actually based on everything that's gone on. there's discussion down in washington, this kind of consolidation among industries and whether or not there would be some kind of trigger to bring back some more normalcy. though i think technology's taking it too far. you'd never go back to what it was. >> but there could be a happy medium. >> down here at least at the new york stock exchange there still is the happy medium. there are brokers that go back and forth and interact with each other all day long. >> have the machines got too much power? >> well, yes, but i think they're trying to get it back. people are talking about kill switches or whatever.

bob pisani has noted time and again, for example when they had that snafu with knight, the guys on the floor knew instantly there was something wrong. they're standing there saying this is not right but they couldn't get to the people running the machine. >> a 22% decline today, 3,000 points on the dow is what it would be. we're making a big thing about 166. imagine 3,000 points decline. >> i remember it vividly. it will stick with you for your whole life. we're going to go to jackie for a "market flash." >> taking a look at magic jack today, a little bit of a bright spot. internet phone company is up right now more than 12%. this is after it reported a third quarter profit reversing some losses we saw a year earlier. ceo calling these results outstanding saying the company has a good chance to report earnings of above $2 a share for the full year 2012. again, that stock is up more than 12%. $23. sue? >> jackie, thanks. a shakeup in the telecom space this week with sprint

selling a big stake in itself. sprint taking control of clearwire. wireless companies can wheel and deal all they want but there is one thing they desperately all need. we'll talk to the man who controls it. as we head out, a look at the biggest loser on the nyse today. >> everyone, please take your seats. otherwise, clint eastwood will yell at them. in america today we're running out of a vital resource we need to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone's ready with the know how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready. at devry.edu/knowhow. ♪

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the nasdaq decliners outpacing the dow. we'll talk about one thing that has silicon valley shaking in their books. we all know home build verse been on quite the run, right? we talk to top analyst today with a word of warning. though he is still loving another part of the housing recovery. and our outbreak story of

the day and it involves a $150 million taxpayer money problem and also plans where workers play card because they have no work to do. all those things coming up on "street signs," 2:00 p.m., top of the hour. dow jones industrial average now off 190 points on the trading session. we're going to keep very close eye on this market for you today. meantime, america's insatiable demand for connective devices has created a traffic jam that's literally clogging the airwaves. if analysts' forecasts are right, what can be done to help regulate the data overload? first on "power lunch," answers from the fcc chairman, welcome back to "power lunch." i guess that is the question. i know that you, as chairman of the fcc, have taken some pretty dramatic steps to try and

increase the access to spectrum. tell us about it, including the auctions that are coming up. >> we're taking a number of steps including creative incentive options to free up more spectrum. this is a problem that comes from too much demand and it is a problem that actually comes from growing u.s. leadership in this space. four years ago we were talking about mobile innovation, but we were talking about it in asia and we were talking about 3g and how the u.s. fell behind europe. flashforward to today, we invented the apps economy in the u.s., we're leading the world in apps and software, leading the world in 4g, the next generation of mobile. in four years you should the obama administration policy the u.s. has gone to laggard to leader. >> you're saying if you have to have a problem, this is a good one to have. >> indeed. >> we have a seen sprint do some deals. they're buying clearwire. is that the way, absent of the auctions, in your opinion, that companies are going to be able

to get spectrum bandwith absent of the creation of new bandwidth? >> the main thing we have to do is free up new spectrum to mobile broadband. we are doing that through creative ideas. secondary market transactions are part of the mix. i can't comment on any specific transaction -- >> of course. >> -- but we need to do everything to drive more efficiency out of our spectrum band to see more technological advances. >> technology has been such an interesting part of the economy and the sell-offs that we've seen in the last couple of days aside, it seems to also highlight the two tiers that we have in the economy, the older economy, the manufacturing base of the economy, and the technology based economy. give me your thoughts on that and whether you see that widening out from your particular vantage point. >> i see more and more advances in the technology economy or the

broadband economy having very widespread benefits. small businesses all over the country are benefiting from wired and wireless broadband. they're reaching more customers and they're lowering their costs. people all over the country are benefiting from broadband. in fact, if you don't have broadband today, it is hard to find a job because job postings have moved online and jobs require online applications. but more and more the tech sector, broadband economy is creating jobs not just for high-end engineers but for sales people and small businesses all over the country. >> but do you think a large part of the population though is qualified educationally and with skill sets to fill those jobs? it is great to create the jobs been with y, but we hear from tech giants they can't find qualified people to fill those jobs. ? we do have a skills gap in the country. it is important to note the skills gap is not just at the engineering level -- around we need more engineers in the united states -- but it's also jobs that require basic digital

litera literacy. too many basic americans don't have the skills. we want to launch an initiative called connect to compete to try to improve technical literacy in the united states. >> thanks for joining us. we are taking another leg down in the market with the dow jones industrial average now off 188 points and the s&p 500 is down 1.5%. the biggest sell-off percentage wise is in the nasdaq. we're going to take a quick break and go back down to the new york stock exchange and talk about this market when "power lunch" comes back in a moment. ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission?

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welcome back to "power lunch." take a look at shares of guess. morgan stanley initiating on the company with an underweight while the shares look cheap. morgan stanley says it has a higher risk profile, also lower earnings in its tier, also saying that the core business in the u.s. and also in europe could come under pressure. shares of guess right now down more than 7%. guys, back over to you. >> jackie, thank you. let's take a look at where the market stands right now. the picture is not getting any prettier. in fact it is getting less pretty.

dow is now down 208, almost 209 points. 1,340 as we head into this weekend. 1,432 was the number for the s&p 500, off about 1.67%. nasdaq lost 69 points or 2.25% as tech is selling off. let's go to bertha coombs at nasdaq now to tell us who's falling apart and why. >> we've got the nasdaq here hitting some two-month lows. pulling back and it's the big caps that are the big reason why. no surprise. google is in that mix. 24 hours ago, surprising the market. that 8% drop we saw in google yesterday extending those losses. it's come off of the lows of of the session, but still very, very weak here. also having its worst day since back on august 6th. so we are seeing that contributing to the downward movement. in terms of the impact, you put

together apple, microsoft, and google, and that accounts for about 40% of the downside in the nasdaq big cap. all of them are pretty weak. google in fact will need to start watching down in the area of around $630 or so. that's its 200-day moving average. they're all below their 50-day moving averages here. again the concern is the slowdown. apple, which had seemingly seemed immune with its real appeal to consumers these days, tyler, now is really going to be suspect as we go into next week, the debut of the mini and its earnings. >> bertha, i want to bring in bob pisani, and sue, jim yourio, we continue to watch the dow slide down now 209 points. bob pisani, i saw a fact earlier this hour indicating of the s&p 500 companies that had reported, 70% so far have beaten in terms of earnings per share, but only 40% have actually exceeded

forecasts on revenues. that's much lower than is typically the case and it points to what you were talking about earlier, a slowdown on the top line. >> with earnings growth roughly flat, let's face it. flat earnings growth, 1.3% revenue growth. hard to grow earnings on 1.3% revenue growth even if you're cutting costs. >> jim, the thing that sticks out to me -- i actually just got an e-mail from a hedge fund manager -- we are having this sell-off on a day when we're remembering what happened in 1987. no comparison certainly in any way, shape or form to the type of down draft that happened in '87. however, what's the headline risk over the weekend with the retail investor who has not participated the way they normally would in this market as it's run up to its highs. they're going to look at those headlines tomorrow morning if this sell-off continues.

what happens monday? >> i think that that risk is very real. but the problem i have with that is that most of the retail investors have stayed away over these last few months. the reason i don't see any possibility of an enormous bear market is that it is somewhat of an underinvested market by the mom and pop. we're waiting for that money to come in before we call a high. to me this still seems relatively orderly. >> jim, who owns the market? if people -- if the hedge fund traders don't -- high-frequency traders don't own the market, they sell it off every day. what aliens are owning the stock market? the usual thing is institutional people. >> it is probably institutional people, too. but statistics are statistics. lack of participation and money on the sideline. to answer your question it must be aliens. i don't know, but i know there are a lot of people who have mistrust in the market and have not wanted in yet. >> on a day like today, that's not going to get them in the market. >> not a day like today. there's google, flash crashes, a

lot of bad headlines that keep people out. this is certainly not helping. >> bertha, it is not just technology companies that are doing poorly today. we're looking at mcdonald's and chipotle. there are in fact some technology companies that are doing okay today. riverwed technology, they do network appliance services. it is growing, it is a much smaller company, granted. so it is taking share, it's growing. i actually didn't even see any weakness in europe. sandisk also putting in a fairly bullish report as it tries to go from being a flash drive kind of consumer company to more enterprise. it's also saying that it's seeing some strength in its embedded mobile area. part of the problem that we're seeing in tech here is the disruption and the switch. you've got a lot of players trying to go into a lot of different areas, and we are switching -- we've gone from the pc, we've gone from you tablet, now we're going to mini tablets

and everybody's trying to grab a fit of fear. in all of this disruption it is very difficult to try to really get -- microsoft was tauting their surface tab plet. on the call they didn't want to give any numbers. >> bob, speak to the fact that this is a broad based sell-off. they're raising cash. they're selling the gold market, selling the platinum market, they're selling all the way across the board in equities. >> well, very simple. banks were better than people expected but now that we've got techs, not just seeing slowdown in pc, but business software is a bit of an issue. on industrials and the materials, there's more caution on the global economy. that's why the gold stocks are down. if i worry about inflation, it is a worry about a slower global economy in india and china, for example. that would hurt gold sales. >> jackie, you have "market flash" for us. >> i do. taking a look at u.p.s. shares, they are at session lows.

one of the reasons could be that the european commission has issued a statement of objection regarding the intended merger between u.p.s. and tnt express. it is a steady decline from the open today, down 2%, 72.07. we are down about 208 points right now on the dow jones industrial average, down almost 70 right now on the nasdaq. a complete marketup date on the other side of a quick break.nt your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer. monarch of marketing analysis. with the ability to improve roi through seo

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let's give you a final market check for this hour with the industrials now off 210 points. that's about a 30-plus, almost 40-point decline just in the last 60 minutes. s&p 500 off more than two-thirds percent at 1,432. nasdaq in percentage terms the biggest of of the losers today, off 2.2% at 3,004. >> bring back in jim yourio, our contributor. he's been with us all week and it's been some week for you to be with us. i'm sitting at home, i'm an individual investor. is this an opportunity? what would you be doing in this particular market? >> well, there's some things that don't seem to be affected by this big sell-off.

national gas looks good. if national gas closes high today i may add to that. but i maybe would buy against those lows of the range but not too much. >> jim, thanks. great week. appreciate it. that does it for us on "power lunch." stay with cnbc all afternoon. ty, have a good weekend. to you, sue. "street signs," everybody, starts now. stay with us. the tech wreck rolls on and it is taking down the market with it. google, microsoft, facebook, all being hit lately today as well. apple down for the month, too. and many of them have the same problem he, which is the cell phone. right? that. how do they overcome the common enemy of mobile. what does is the matter with mickey d's? sales growth down. the stocks down as well. how can mcdonald's turn it